Austria mobile auction targets at least 526 mln eur

VIENNA, March 18

VIENNA, March 18 (Reuters) - Austria aims to raise at least
526 million euros ($682 million) from the sale of radio
frequencies that operators need to build superfast mobile
broadband networks, the regulator said.

The Austrian Telecom Control Commission (TKK) published
details on Monday of an auction it plans to hold in September,
following similar sales in European countries including Germany,
France and Britain.

Georg Serentschy, head of the RTR regulator that works with
the TKK, said there was no upper limit to the bids the country's
three operators could make for the 28 blocks of 800 megahertz
(MHz), 900 MHz and 1800 MHz frequencies on offer.

But he added: "It's not about maximising the proceeds."

One of the aims of the auction is to promote better mobile
coverage of remote and rural areas of the Alpine republic by
attaching conditions to the licences about the percentage of the
population that operators much reach.

The Czech Republic this month suspended its auction of
mobile frequencies after bids rose so high that the regulator
feared it would lead to unrealistically high prices for services
and could slow efforts to build the networks.

The sums being raised are tiny in comparison with the tens
of billions that telecom operators paid in 2000 to buy licences
for the last generation of mobile technology, 3G - far more than
they reaped in profits from their investments.

But the auctions come at a tough time for operators who are
fighting price wars instead of persuading customers to pay more
for the increasing load on their networks of mobile Internet
services, many of whom are slashing or ditching dividends.

The United States, Japan, Korea and Scandinavia already have
4G networks.

Austria, with its population of just 8.4 million, is one of
Europe's hardest-fought markets and has the lowest starting
prices for mobile packages, at 7 euros per month including
bundles of voice minutes, SMS text messages and data.

The country's smallest operator, Hutchison Whampoa
, bought the second-smallest Orange Austria at
the start of this year in the hope of easing competition with
bigger rivals Telekom Austria and T-Mobile.

T-Mobile raised its contract prices for new customers this
month in a move seized on by some observers as an early sign of
market repair, although the operator cut subsidies and said it
might earn less per customer in the long term.

Two blocks of spectrum have been reserved in the Austrian
auction for a potential new entrant, although the likelihood of
one materialising is low, experts believe.

"We have really passed the stage where there is room for a
new entrant," said Bengt Nordstrom, co-founder and chief
executive of Swedish telecoms consultancy Northstream.

"I know that the regulators and the competition authorities
would like to have it but it's unrealistic."
($1 = 0.7717 euros)
($1 = 0.6619 British pounds)
(Reporting by Georgina Prodhan; Editing by Bernard Orr)